ArcLight Capital to Buy $183 Million Stake in OGE Energy's Pipeline Unit

OGE Energy Corp., the owner of Oklahoma City’s electric and natural-gas utility, said private- equity firm ArcLight Capital Partners LLC will pay $183 million for a 9.9 percent stake in its Enogex gas-pipeline and processing unit to help fund expansion.

The agreement allows ArcLight, with offices in Boston, London and New York, to expand its interest in the future, Oklahoma City-based OGE said today in a statement. OGE will include its energy-marketing unit, OGE Energy, with Enogex. The deal is expected to close by Nov. 1.

Enogex is building a $124 million gas-processing plant, extending pipelines and adding shipping capacity to handle rising output from western Oklahoma and the Texas Panhandle, OGE Chief Executive Officer Peter Delaney said on an Aug. 5 earnings call. Planned spending through 2011 at the unit rose by $140 million in the second quarter, he said. The unit’s net income rose 39 percent to $22.3 million from the year-earlier quarter.

Basins including the Cana field in Canadian County, Oklahoma, and the Granite Wash formation in Texas and Oklahoma produce natural-gas rich in liquids such as ethane and propane, which sell at a premium to dry gas after they are extracted by processors such as Enogex.

The announcement was made before regular trading began on U.S. markets. OGE rose 77 cents, or 1.9 percent, to $41.27 yesterday in New York Stock Exchange composite trading, for an increase of 12 percent this year.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

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